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Customer Experience, Product Management, Products, Retention, Startups

Achieving product-market fit should be job #1. By @SueDuris

This is a guest post by Sue Duris, Director of Marketing and CX at M4 Communications.

Every startup wants to succeed. Startups want it bad. They know nine out of 10 startups fail. They want to be that one that succeeds!

They spend all their time first making that great product. And trying to make it better.  They add to it. A new bell here. A new whistle there.

And when they think they have the next big thing that’s going to disrupt the market, they go hunting for capital, trying to get any venture capitalist and angel investor they can to fund them.

“Capital first” is the battle cry so built into the startup community that whichever startup event people attend, the conversation seems to always be about raising money.  

Yet, when a founder does get an investor meeting, typically investors want evidence to support founder claims. They want to see metrics such as monthly and annual recurring revenue, active users, renewal rates, customer acquisition cost, customer lifetime value, and the like.

They also want to know about the market and the customer, in addition to your product. Is the market big enough? Who is your customer? What value do they get from your product? What kind of traction do you have in the marketplace?

Do you know this info?

While startups make their primary focus about raising capital, they place their secondary focus, if at all, on the customer.

Many times I hear startups tell me “I’ll focus on user and customer research after I get funding”.

Too many startup founders feel that getting funding is the magic pill that will solve all of their problems and put them on some fast-track to success.

But, don’t investors want to know about your customer strategy – i.e. how you make money – before they give you money?

Raising capital is very important. But to focus on it first is the wrong approach.

The first thing a startup should do is achieve product-market fit.

It is everything.

It typically determines whether you succeed or fail. It’s what sustains a startup and enables it to grow.

Make something people want.

It seems basic.

Creating a product that doesn’t fit what the market wants is silly. Yet, many do exactly this.

And if a startup doesn’t achieve product-market fit, chances are it will fail.

According to CB Insights, who has been compiling failed startup post-mortems, the #1 reason startups fail is because they don’t achieve product-market fit. This is cited by 42% of CEO’s of failed startups.

According to CB Insights, the #1 reason startups fail is because they don’t achieve product-market fit. Click To Tweet

Product-market fit is hard work and it takes time. There is no doubt about that. Yet, it’s too much work for some founders. They want the glory but not going through all the blood, sweat, and tears to do the work.

This is where things become paradoxical.

These are the same startups that worry about churn.

“We have to eliminate churn,” they say.

But to ultimately reduce churn means you have to first retain your customers, build loyalty and drive customer lifetime value.

So what is product-market fit and why does it matter?

According to Marc Andreessen, product-market fit means being in a good market with a product that can satisfy that market.

He goes on to say product-market fit is the only thing that matters.

When it’s not there you can tell because customers don’t get your value, no one is talking about you, usage isn’t growing, conversions are slow or not at all, etc.

But when it’s there, revenue, usage, and growth are fast.

People crave your product.

People are talking about you, especially your customers.

When your customers advocate and sell for you, you have achieved it, something I call “customer nirvana”.

It’s not a destination. It’s not a journey. It’s a mindset.

When your customers advocate and sell for you, you have achieved customer nirvana. And it’s not a destination. It’s not a journey. It’s a mindset. Click To Tweet

You have to keep on working towards it. You have to give your customer that experience. The experience is the product. And it all starts with product-market fit. And making everything about the customer.

To get to product-market fit, ask yourself:

  • What is the unmet/under met need my company or product is attempting to fulfill?
  • How do I meet that need?
  • What value do I deliver to my customer that enables them to achieve their business outcomes? What is my customer’s WOW or aha moment?

That moment is what gets you to the value. But it isn’t only the value, it’s how quickly you can get to that value. Time-To-Value is key.

You have to know your why – why do they buy from you?

You have to know the what – what is resonating for them that is compelling them to buy from you?

Then you must know the actions and behaviors they have with you that’s helping them be successful.

Knowing your why, and how customers use your product is what will sustain you.

This is THE WORK.

And, you’ve got to do the work if you want to drive revenue, growth and customer lifetime value.

This work will get you to a minimum viable product, which you can use to gain traction, which you can use to get noticed by investors, which will help you get funded.

Having the insights from product-market fit is what drives and sustains growth.

Can product-market fit be measured?

It’s questionable. But there are certain trends you can look for in the product-market fit path.

Retention is the social proof to product-market fit. Other metrics to be watching for product-market fit include NPS, Customer Effort Score (CES), increased sales (upsells, cross-sells, and greater share of wallet). Win-Loss can also hold insights to how healthy product-market fit is.  

I scratch my head when companies don’t focus on retention. They should double-down on it. Yet, for many, it’s an after-thought.

In its 2018 NPS & CX Benchmarks Report, CustomerGauge still finds retention is an issue.

44% of respondents don’t know their customer retention rates, that’s one in three companies don’t know this vital info!

This aligns fairly well to my research that 2/3 of marketing budgets focus on acquisition activities and 1/3 is focused on retention.

This is another head-scratcher.

Companies place more resources on acquisition and feel it is more valuable than retention. Forget about data points from Bain – it costs 6-7 times more to acquire a customer than retain one – or Gartner – 80% of your future profits come from only 20% of your existing customers.

According to Bain, it costs 6-7 times more to acquire a customer than retain one. And according to Gartner, 80% of your future profits come from only 20% of your existing customers. Click To Tweet

There are numerous reasons for the push on acquisition.

This is the culture of the organization and how it measures success. Marketing doesn’t view itself as responsible for Marketing (to this I find fascinating, considering many marketing departments feel they own customer experience). Retention gets passed around so many times that ultimately no one ends up owning it. Investing and analyst communities place high value on acquisition and so CEO’s follow suit to be in lock step. Leaders have number-envy.

Ultimately, retention must be a mindset that is engrained in the culture.

It also troubles me when I hear people say product-market fit is elusive.

Why? How?

You want to determine product-market fit?

Get out there and research. Find people. Ask people. Take the data they give you and identify insights to help you craft your business model. Do the work.

Raising capital is vital. But it should not be the first plan of attack. Startups must make product-market fit job #1. All roads to startup success begin there.

Acquisition, Customer Experience, Emotion, Human-to-Human (H2H), Product Management, Products, Retention, SaaS

9 Empathy Exercises that Help Product Teams Improve CX

9 Empathy Exercises for Product Managers

What is empathy?

Empathy is the ability to understand and share the feelings of another. For Product Managers looking to improve customer experience (CX), that definition translates to doing more than understanding the user’s pain points, but also looking at the emotional landscape of what it’s like to use the product – when it is working, and when it isn’t working.

Empathetic Product Managers ask themselves:

    • How does using the product make the customer feel?
    • How does the customer want to feel when using your product? What would be the best possible emotional outcome for them?
    • How do I ensure the product developers understand and take the customers’ needs into consideration in their process?

The answers to those questions affect every facet of business, from acquisition to retention. It’s how, through CX, you can generate rapid growth through word-of-mouth recommendations, and sustain your success with customers who never want to leave.

Read More on Wootric
💗 Check out Nichole’s Services for SaaS startups 💗

Churn, Community, Customer Success, Human-to-Human (H2H), Products, Retention, SaaS, Startups

Slack’s community superpower for SaaS is all about churn


This article was originally sent as an e-mail as part of my newsletter, Sunday Brunch with Nichole: A Weekly Missive on Community Growth


For SaaS products – whether B2B or B2C – Slack is where it’s at. By which I mean Slack is where your customers are already. But Slack has more going for it than just that. The platform is remarkably well-suited to creating exactly the kind of communities and engagement we’ve been talking about. The kind that fosters loyalty.

Consider:

Subscription-based businesses require strong customer relationships to prevent churn and increase customer lifetime value (the metrics that make or break your business).

Creating a community is one way to strengthen customer relationships and improve loyalty.

This is really – really – about eliminating churn.

Eliminating ‘Champion’ Churn

One of the leading causes of churn, especially for B2B SaaS, is when your ‘champion’ (the person who’s been talking you up to the boss, convincing everyone that you’re the solution they need) leaves. But if the whole team is on Slack? You’re already cultivating relationships with everyone, and they understand the value you bring.

Eliminating Churn among VIP Customers

BubbleIQ reported ZERO churn among the customers they shared Slack channels with. Now, they only began opening up private channels for their VIP customers who were already loyal and engaged, but still. Zero is a good number.

“Most companies rely on email or chat for support — but it turns out that’s a surprisingly high friction method of support for business customers today. Forcing customers through a formal contact form or into a long email thread creates a barrier between you, and makes it difficult to respond quickly to high priority issues.” – BubbleIQ

ProdPad’s Slack Community Experience

ProdPad also has never had a customer churn who was part of their Slack community.

Customers who join our Slack community were not cancelling their ProdPad plans at all. In fact, 99% of our cancellations were (and still are) coming from customers who weren’t part of our community.

In fact, ProdPad published a fantastic 40-minute video about their Slack community, and you should watch it. But I particularly loved what they said about how their Slack channel fostered and strengthened their relationships with their customers.

Andrea Saez, Head of Customer Success, talks about the “happy accidents” she discovered when their Slack community went live.

  • Users were helping other users to troubleshoot issues – out of the goodness of their hearts. So for those of you who might be concerned about the increased pressure put on your Customer Service teams, you might see the opposite effect. Cool, right?
  • The whole ProdPad team became involved and made themselves available to chat and answer questions, even the CEO, which meant that customers were taken care of even if the primary Slack designees weren’t immediately available. The “side effect” of this was that the whole team became more customer-centric, adding “a human touch to everything.”
  • Engagement levels rose – to the point where customers made friends with other customers.

As with any community, moderation was a challenge. They help set expectations with a Welcome Bot named Winston who greets new members and tells them the basics: how to submit feedback and ticket requests, and how to reach ProdPad members, as well as reminding them to be kind. I love the use of automation here!

There are so many good ideas in in this video for how to set up and use your Slack product community. It’s definitely worth the watch.

If you’re considering using Slack for customer support, Robbie Mitchell wrote a comprehensive Playbook for Working with B2B Customers in Slack that I recommend.


This article was originally sent as an e-mail as part of my newsletter, Sunday Brunch with Nichole: A Weekly Missive on Community Growth

If you’d like to receive emails like this one, sign up for my newsletter:

Product Launches, Product Management, Products, Social Media

How to run a successful product launch on social media (#QChat)

I joined Quuu to co-host a Twitter chat about running successful product launches on social media.

They rounded up the highlights…

Q1 How should you use social media in your product launch?

Our Qchatters all pointed out that social media is key for building awareness around your new product:

“I don’t know if I’m being too obvious here… but awareness! Let your followers know that you have a product coming out.” — Ruben Richardson

“I think social media is a great way to build awareness for a product, you can tease information and build anticipation.” — Georgia Burgoyne

“If it is a launch the part of the funnel is probably awareness. Paid social is key for targeting, especially if it is not a mass market launch. Influencers may also be effective if they are strategically used.” — Brandi Rand

It’s really important to leverage your network:

“A community is one of the most important ways to build and launch a new idea. People are power!” — Daniel Kempe

“You want to reach out to your network and let them know way in advance to see how they can help support you.” — Nichole Elizabeth DeMeré

“Find influencers & engage. Build anticipation with a countdown. Include any reputable names you can for social proof — customers, partners, as seen on, etc. What Nichole did with the Hotjar podcast launch was a great example.” — Nicki Laycoax

Nichole also shared some tips on what not to do:

“Don’t spam people. Mass-tweeting/emailing people unsolicited, asking for feedback or upvotes, even if they’ve upvoted similar products in the past isn’t effective. If your timeline is filled with dozens of identical messages, you’re spamming. Be authentic.

“If you’re launching on Product Hunt, do not ask for upvotes anywhere. Feel free to ask for feedback, but asking for upvotes is a big no-no. People should upvote the product because they like it, not because they’re peer pressured into doing so.

“If you’re launching on Product Hunt, link directly to your product page. Linking to “http://producthunt.com” only makes it harder for people to find you and doesn’t have any effect on the algorithm.

“Tools like Thunderclap that shout about your launch are notoriously ineffective — it comes across as spammy, and the super secret algorithm for Product Hunt doesn’t like spammy.”

Read More on Quuu

Wish you had someone to tell you if you’re planning your product launch right? Someone who’s done this before – a lot – and knows what it takes to bring SaaS products successfully to market?

Well hello.

I’ve helped hundreds of companies with their product launches – and I am happy to help you, too!

Launch your product with Rocket Fuel! 🚀

Conversion Rate Optimization, Language-Market Fit, Product Launches, Product Management, Products, Startups

Don’t launch your product without a strong value proposition.

In today’s competitive landscape, brands are continually on a quest for innovation. A lot of research goes into understanding the consumer mind, their wants, and demands. Using such knowledge, companies invest thousands of dollars every day to develop new products.

A Nielsen report shows that almost 3000 new products are launched every year in the Consumer Packaged Goods (CPG) space. Out of these, only 15% are truly successful.

Even if you have created a great product, a lot of its success is dependent on the launch. A product launch is vital because it creates the first impression in your audience’s minds. Here are some of the best tips shared by experts to help you avoid a product launch failure.

Shane Barker asked 32 experts to share their best tips on how to avoid product launch failure…

Here’s my tip:

You don’t want to launch without a strong value proposition. I see this happen far too often when people submit products to me for review (to post on Product Hunt – because that’s how they’re going to launch), I go to their website, and their value proposition does not convey their product’s value. It’s generic, or vague, or not there at all. There’s nothing that tells potential customers, at a glance, why they should be interested in the product or how it helps them solve their pain points. I recommend that anyone looking to launch a product first get the Value Proposition Design book (strategyzer.com/vpd) and work through it. Although there are many ways to work on your value prop, this is my favorite.

Two really good value propositions are on Lyft right now. They have a two-way marketplace, one for drivers, one for riders, and both value propositions are on point. The driver’s value prop is “turn miles into money” and the riders value prop is “meet your 5-star ride.” The first is stronger than the second, in my opinion, but that “meet your 5-star ride” basically tells riders that they will, absolutely, have a great experience.

Read Other Expert Tips on Shane Barker’s Blog

Wish you had someone to tell you if you’re planning your product launch right? Someone who’s done this before – a lot – and knows what it takes to bring SaaS products successfully to market?

Well hello.

I’ve helped hundreds of companies with their product launches – and I am happy to help you, too!

Launch your product with Rocket Fuel! 🚀

Customer Experience, Customer Success, Emotion, Products, Retention, SaaS, Startups

A Completely Different way to Look at Customer Fit for SaaS Startups ft. @LincolnMurphy

There are so many ways businesses segment customers, and many of them are useless: demographics, location, purchasing histories, size of company, how much the customer pays, and so many more.

But there’s one method of segmentation that tends to be overlooked. And overlooking it will lead, invariably, to churn.

It’s called Appropriate Experience (AX). And I guarantee it’s not what you think.

What is Appropriate Experience?

Appropriate Experience is an extremely customer-centric idea, because it’s all about them. The customers. Their experience. But this isn’t “customer experience.” Forget CX and customer satisfaction. No, no. This is completely different.

Appropriate Experience is about how the customer needs to be treated and supported by you so they can reach their desired outcome.

But what is it really – in practice?

For SaaS, a good example of Appropriate Experience might be customers who need high-touch customer support vs. low-touch. Maybe the customer’s Appropriate Experience is self-service, because they have the expertise and technical abilities to figure out most things for themselves. Or maybe the customer’s Appropriate Experience requires some hand-holding, a designated customer-success manager and 24-7 help desk.

Lincoln Murphy, who championed AX, explains it this way:

You see, a customer has a required outcome. A thing that they need to achieve… And they have a way that they need to achieve that Appropriate Experience. That Appropriate Experience – AX as I call it – goes across the entire customer lifecycle.

He mentions Appropriate Experience within the context of the checklist he recommends using to see whether a customer has “success potential.”

Here’s that checklist (view full descriptions on his article about success potential.)

  • Technical fit
  • Functional fit
  • Cultural fit
  • Competence fit
  • Experience fit
  • Resource fit

In many ways, Appropriate Experience (aka. Experience fit) is the flip-side of Resource fit. Resource fit asks the customer if they can spare the resources to put in the time/money/manpower to succeed with the product. Experience fit asks you – the SaaS company – the same question.

The question you need to ask yourself is…

Do you have the resources to ensure that this customer has the experience they need to reach their ideal outcome?

What experience are you able and willing to provide?

You may not have the resources to serve customers who need the high-touch approach.

And that means that you can’t give that particular customer segment their Appropriate Experience, and they won’t be successful with you.

You can’t afford not to identify your customer segments by the experience they require.

Yes, that also means you can’t afford to keep customer segments to whom you can’t deliver an Appropriate Experience. Even if they’re paying you.

It sounds crazy to turn away good money, I know.

But these are people who will never be satisfied with what you offer. They won’t refer you business. They’re highly likely to leave lackluster reviews. And they will churn – after wasting a tremendous amount of your time and resources trying to make them happy when that was never gonna happen.

What happens when you segment your customers and find that a lot of them could use a different experience? Well, then it’s…

Problem-solving time

When you use Appropriate Experience as a factor in customer segmentation, you may find that a large part of your customers demand a type of experience you’re not currently providing.

Uh oh.

You have a few options.

You might consider expanding your services and scaling to meet that need.

If this is a possibility, you’ll want to first survey that segment and ask them what experience would most help them achieve their desired outcomes. But when you do, keep Lincoln Murphy’s checklist in mind. Are these customers who have success potential, if only they had a slightly different experience?

Also keep in mind that Appropriate Experience isn’t limited to how much help a customer gets. It’s not just a high-touch/low-touch issue. If my desired outcome is to go out to dinner with my significant other for a romantic evening, there is a very specific experience I need to achieve that, and Burger King isn’t going to do the job. Think holistically.

Another option, of course, is to not scale or change the experience you provide. You could decide to focus on the customer segment whose Appropriate Experience matches what you’re prepared to offer.

Both are actually good options.

The only bad option is accepting the business of someone you can’t really serve.


Let’s Get SaaSsy – I’m offering a limited number of SaaS consulting engagements.

Products

10 of My Favorite Products in 2015

10-products-2015

I’ve shared some great products in my Product Hunt collections for art, music, and cooking, and here are my favorites for this year.


APOD Daily

nasa-apod

I love keeping up with NASA’s Astronomy Picture of The Day and APOD Daily is the most convenient way to do it. It auto updates my Twitter banner every day with the most recent picture.

Blue Apron

blue-apron

Cooking is one of my favorite hobbies, and I’ve learned so much about it this year from making Blue Apron recipes. I’ve especially learned that vegetarian dishes can be super yummy!

They deliver three recipes + all the ingredients once a week. What’s great about Blue Apron is that they send the ingredients in exactly the right proportions, so I don’t have anything left over that might get thrown out from not being used in the recipe.

Seven (out of ten) of my favorite recipes from this year are ones I learned from Blue Apron:

Electric Sheep

electric-sheep

Electric Sheep is a screensaver and collaborative abstract artwork founded by Scott Draves. I’ve been using it for about ten years.
Fandor

fandor

Fandor is basically an alternative to Netflix. It has “exceptional handpicked stories of all lengths and genres from around the world.”

What I love about their service is the categories make more sense than those on Netflix. You can browse films by country, year, and length, and they indicate whether films pass the Bechdel test. They frequently feature films from The Criterion Collection and have a community for film enthusiasts.

Check out how Erik Martin (former GM of Reddit) described his experience with Fandor on Product Hunt, “Huge fan. It takes out the pain of ‘what should we watch?’ Just give control over to Fandor and trust them to pick out something good. There’ll be some films that you like more than others, but the overall experience is so much better. To make it even better, don’t read the description for what they suggest you watch next. So much more fun when you have no idea if you’re watching a black comedy or Finnish melodrama. Give up control for a couple hours a week and just let a film wash over you.”

Hipstamatic (& Instagram)

Hipstamatic

I use Hipstamatic to take beautiful, artistic photos and use Instagram to share them.

Here’s my 2015 in photographs.

 

Philips Hue Lights

hue-lights

These smart lights illuminate my home every day. They’re perfect for people who love to have control over their lighting, and they can be controlled wirelessly. They are supported by a wide range of apps that can be set up to react to music, sports scores, weather, traffic, and more.
See Hear Party

see-hear-party

See Hear Party is one of the best ways to entertain party guests (or, in my case, potluck guests). With it you can can personalize GIFs dubbed to your favorite music on SoundCloud.

 

Slack

slack

I use Slack every day to communicate with my friends in Unicorn Think Tank and with my team at Inturact.

Slack brings all your communication together in one place. It’s real-time messaging, archiving and search for modern teams.

SoundCloud

soundcloud

SoundCloud is super useful for keeping track of music releases from lesser-known artists that aren’t on Spotify, and for discovering those types of releases being shared by friends.

I also find tracks on Hype Machine, look them up on SoundCloud, and save them there.

Spotify

spotify

I mostly use Spotify to create and share collaborative playlists. Ryan and I used it to create a playlist of tracks we enjoyed this year: